Sequential (Step) Method of Support Department Cost AllocationChekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments HumanResourcesGeneralFactory FabricatingAssemblyDirect costs$165,000$380,000 $114,200$90,000Normal activity: Number of employees—40 70150Square footage1,800— 5,50013,200The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost.Required:1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Human ResourcesGeneral FactoryFabricatingAssemblyHuman Resources General Factory 2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is zero, enter"0". Round your answers to the nearest dollar. Support Departments Producing Departments Human ResourcesGeneral Factory FabricatingAssemblyDirect costs Allocate: General Factory Human Resources Total after allocation Sequential (Step) Method of Support Department Cost AllocationChekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.Direct costsNormal activity:Number of employeesSquare footageHuman ResourcesDirect costsSupport DepartmentsHumanResources$165,000Allocate:1,800General FactoryHuman ResourcesGeneralFactory$380,000Human Resources40Producing DepartmentsThe costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the sequential method to allocate support department costs. The supportdepartments are ranked in order of highest cost to lowest cost.Required:Human Resources30Fabricating Assembly1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations.Proportion of Driver Used byGeneral Factory$114,200705,500General Factory2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is zero, enter"0". Round your answers to the nearest dollar.Support DepartmentsProducing Departments$90,00000150General Factory13,200FabricatingFabricatingAssembly30Assembly00

The sequential method is utilised to divide the expense of service departments among other…

Sequential (Step) Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $165,000 $380,000 $114,200 $90,000 Normal activity: Number of employees — 40 70 150 Square footage 1,800 — 5,500 13,200 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Human Resources General Factory Fabricating Assembly Human Resources General Factory 2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is zero, enter"0". Round your answers to the nearest dollar. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs Allocate: General Factory Human Resources Total after allocation

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 8E

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Sequential (Step) Method of Support Department Cost Allocation

Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.

	Support Departments		Producing Departments
	Human Resources	General Factory		Fabricating	Assembly
Direct costs	$165,000	$380,000		$114,200	$90,000
Normal activity:
Number of employees	—	40		70	150
Square footage	1,800	—		5,500	13,200

The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost.

Required:

1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations.

	Proportion of Driver Used by
	Human Resources	General Factory	Fabricating	Assembly
Human Resources
General Factory

2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is zero, enter"0". Round your answers to the nearest dollar.

	Support Departments		Producing Departments
	Human Resources	General Factory		Fabricating	Assembly
Direct costs
Allocate:
General Factory
Human Resources
Total after allocation

Sequential (Step) Method of Support Department Cost Allocation
Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.
Direct costs
Normal activity:
Number of employees
Square footage
Human Resources
Direct costs
Support Departments
Human
Resources
$165,000
Allocate:
1,800
General Factory
Human Resources
General
Factory
$380,000
Human Resources
40
Producing Departments
The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the sequential method to allocate support department costs. The support
departments are ranked in order of highest cost to lowest cost.
Required:
Human Resources
30
Fabricating Assembly
1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations.
Proportion of Driver Used by
General Factory
$114,200
70
5,500
General Factory
2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is zero, enter"0". Round your answers to the nearest dollar.
Support Departments
Producing Departments
$90,000
00
150
General Factory
13,200
Fabricating
Fabricating
Assembly
30
Assembly
00

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